Sale and rent-back (SRB) debacles of the past couple of years have led the Government to bring supposed “mortgage rescue” schemes within the remit of the Financial Services Authority. From July 1, an interim regime applies, so that firms providing SRB schemes will need to comply with FSA threshold conditions including the requirement to have adequate resources and to be run by fit and proper people. See FSA – SRB Schemes.
It seems, however, that the courts may also be prepared to step in to assist a poor, beleaguered mortgage debtor, whose SRB buyer turns out to be less of a saviour than was envisaged. Much coverage has been given to a county court decision (Redstone Mortgages Plc v Welch & Jackson, 29 June 2009) in which promises made by the SRB buyer about the nature of the deal were held to create an estoppel in favour of the debtor which bound the SRB buyer’s mortgage lender. Detailed coverage of the case is provided on the Nearly Legal website, and news coverage of the case can be seen on the BBC News website. Counsel acting on the case on a pro bono basis has also posted a brief report of the case on the Maitland Chambers website.